Alibaba, SoftBank Team up on Cloud Services in Japan

(Bloomberg) — Alibaba Group Holding Ltd. teamed with its largest shareholder SoftBank Group Corp. to form a cloud computing service venture targeting Japanese customers, as the Chinese e-commerce giant expands one of its fastest growing businesses.

The venture known as SB Cloud Corp. will open a new data center in Japan to tap SoftBank’s customers ranging from startups to global organizations, extending a battle for customers with Amazon.com Inc. Alibaba will provide services including data storage and processing services, the companies said in a joint statement.

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Alibaba’s cloud unit almost tripled revenue to more than 1 billion yuan ($153 million) in the March quarter. The business could account for more than $1 billion of Alibaba’s revenue by 2018 and the public cloud presents a $120 billion global market opportunity, according to research by SunTrust Robinson Humphrey Inc.

SoftBank, owner of Japan’s third-largest phone business, will have a 60 percent stake in the new venture while Alibaba will hold the rest.

Alibaba’s Japan venture follows last month’s announcement of a partnership with one of South Korea’s largest conglomerates SK Holdings Co.

China’s biggest e-commerce operator earlier teamed up with Accenture Plc to target clients in China and Southeast Asia, and it said in April it would work with Germany’s SAP SE. It has data centers in countries including Singapore and the U.S. and is planning to open another in Europe as soon as this year.